We naturally express rhythm and expression by a gesture, a movement with our bodies. That's what happens when a small child spontaneously dances to music. Rhythm as a function of movement and the relation of muscular tension and relaxation is hard-wired into our system; in our breathing, in our walking, in our vital functions.
Physicalising rhythm is a vital first step into developing a good sense of time. Expressive gestures, dancing, and something as simple as clapping or tapping our feet are things that we should not stifle in young students. Ideally, by constantly reinforcing the recognition of rhythm in the timing of our movements, we help the student to reach a point where the very movements he makes when playing are inseparably linked with the rhythm and expression of what he plays.
Walking around, dancing, jumping, clapping, stomping our feet... these are all good things which we should encourage. I like to encourage parents to let their children play a simple percussion instrument, or at least to let him bang on the pots and pans in the kitchen once in a while (which my grandmother let me do to my heart's content when I was very young).
A metronome is essential to learning precise time, but the very first step is translating rhythm into a physical gesture, not spending hours trying to follow along with the clicking, beeping or blinking light.